Atos SE of France has struck a $3.4 billion deal to buy
Syntel Inc.,
a U.S.-based information-technology company, in a move that would give it access to some of the biggest U.S. financial-services companies.

The French company said late Sunday that it plans to pay $41 a share in cash for Michigan-based Syntel. Shares in Syntel closed at $39.13 on Friday, having more than doubled over the past 12 months. Including assumed net debt, the deal values Syntel at $3.57 billion. The Wall Street Journal reported the deal earlier Sunday.

Atos Chief Executive Thierry Breton said Sunday that an incentive for a deal was Syntel’s strong know-how in digital fields, including cloud services, social media, mobile, analytics and automation. All are increasingly important areas for companies’ IT operations.

The acquisition would also boost Atos’s presence in North America, where the company’s revenue fell unexpectedly in the first three months of the year. In particular, Syntel has strong relationships with financial-services firms, as well as companies in the health-care and retail sectors.
American Express,
State Street Bank and FedEx Corp. were Syntel’s three largest customers in 2017, accounting for about 45% of the company’s annual revenue. Its 10 biggest customers generated 69% of its total revenue last year.

Atos has been seeking significant acquisitions to expand its product portfolio and geographic footprint. Last year, the IT and payments-technology company lost out to French rival Thales SA in an effort to acquire smart-card maker and digital security company
Gemalto
NV for €4.8 billion ($5.6 billion).

Atos is about five times the size of Syntel, with a market value of roughly €13 billion. The companies serve some of the same industries, including life sciences, financial services, manufacturing, retail and telecommunications, and both target markets in North America and Europe.

Adding Syntel’s 23,000 engineers would give Atos the added flexibility to pursue shorter-term projects, rather than the five- to seven-year projects that it has traditionally coveted, Mr. Breton said.

The Atos CEO said the latest round of negotiations began early this year, but added that the companies had been talking on and off since October 2014.

Syntel Chief Executive Rakesh Khanna, who is based in India, would stay with the company and perform an enlarged role, as well as join Atos’s executive committee.

The transaction, which is expected to close by year-end, would be accretive to Atos shareholders, with earnings per share expected to grow by a double-digit percentage from 2019, Mr. Breton said. It is subject to the customary regulatory approvals.

Syntel swung to a profit of $166.3 million in 2017 from a loss of $57.4 million in the prior year, though revenue fell 4.4% to $923.8 million. Atos generated revenue of €12.7 billion in 2017, up 2.3% from the prior year, excluding the impact of acquisitions and currency swings. Net profit rose 11% to €601 million.